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Terror hits the restaurant industry

  • Published at 07:15 pm August 5th, 2016
  • Last updated at 06:43 pm October 4th, 2016
Terror hits the restaurant industry

"For two years, me and my team have worked extensively hard to establish a brand that we have loved and cherished everyday, Takeout. We started with very minimal investments which went up to astonishing amounts due to absolutely unreasonable prices and practices in Bangladesh. On a daily basis we have been harassed by hooligans from political parties. Forced to pay people to be safe for no good reason. Received absolutely no support at all from the government authorities and only harassed on multiple occasions. Despite all the troubles we succeeded in doing something we are proud of," reads part of a public Facebook status update by Fahim Kabir, managing partner at Take Out, one of the top burger joints in Dhaka. Kabir uploaded the status in light of the recent decision by the cabinet committee meeting to evict "unauthorised" commercial establishments in residential areas in the capital. Takeout Banani, too, came under this directive, with Kabir forced to consider a future course of action for his restaurant.

"Now out of nowhere with no regard to the people and their lives involved we might lose all the hard work and sweat we have put in our business. We live in a country where only the powerful and wealthy can flourish and the hard working dreamers are to be squashed. I feel helpless and broken with the thought that I can only be a mere spectator when they decide to break our hard work to the ground. May Allah save us from the tyranny, injustice and evil that resides amongst us," Kabir concludes, disheartened.

The status received 326 shares and was also shared on the Dhaka Foodies website. From there, it was shared repeatedly on social media sites, with many voicing their fears about the consequences of a drive that may wipe out some of the best restaurants and hotels around the capital, leaving little form of recreation for many.

Reeling from the sudden shutdown

When asked why he decided to share Kabir's post, Ashiqur Rahman Rean, founder of Dhaka Foodies, said it was to help show his support for the restaurants that are suffering while also bringing to light the injustice of Rajuk's decision. "Everyone is hurting: foodies, owners, employees. We need to support the administration for the greater good and security but there needs to be proper time, communication and dialogue to ensure that the damage done to these business' and people are kept to a minimum. I don't think that's the objective here," he shared.

So far, mobile courts led by independent magistrates have begun their drives, with restaurants and hotels both being bulldozed, and utility connections being snapped. This move came after the July 1 murders in Holey Artisan, a terrorist attack in Gulshan 2 that left 22 people (20 individuals and 2 policemen) dead. Although the Dhaka North City Corporation (DNCC) identified and issued letters to the concerned in April, these establishments were given a six month deadline to move. However, the Holey attack prompted the government to raid these restaurants before the deadline expired, leaving many restaurant and hotel owners in dire straits.

According to Rajuk reports, there are 215 illegal commercial establishments in Uttara, 500 in Mirpur, 552 in Gulshan-Baridhara, 173 in Dhanmondi-Lalbagh and 105 in Motijheel-Khilgaon areas. So far, mobile courts have already bulldozed and removed nameplates from Food Palace, Mollika, CFC and Dawat in Gulshan. Uttara's Everest Restaurant, Spicy Vice, Bakabo Restaurant, Nana Biriani, and Comillar Rashmalai were also set to be shut down. Meanwhile, restaurants in the "tristate" area (Gulshan, Banani and Baridhara) have begun to comply by closing shop before eviction.

Popular cafe Gloria Jeans as well as Sura-On were seen closed, with no notices given elsewhere. Yellow Submarine, a popular cafe known for their sweet and savoury waffles, posted a status on their Facebook page informing customers that they will "no longer open for business."

"We had to shut down for a lot of technical issues. This unfortunate event could not have been avoided. We do plan on opening again sometime in the future. But until then, we will miss you and we will miss all the wafflelicious smiles that Yellow Submarine Cafe has brought to you over the last couple of years," the nostalgic note read.

While some restaurants are closing shop before mobile courts can launch a raid, others have managed to get court stay orders against the letters issued to the individual restaurants. "God only knows how long we can sustain our stay order," says N R Vicky, proprietor of Melange (Banani), The Mirage (Gulshan 1) and Tokyo Express (Banani), who has received letters from Rajuk warning of eviction if the businesses don't relocate.

Uncertainty looms overhead

While some restaurant owners have received letters and prior notices, others have not, setting forth a state of uncertainty where most restaurant owners are unsure about the future of their restaurants.

Takeout owner Kabir did not receive an individual letter like many others, adding that it was impossible for him to seek a stay order since he has no written notice to issue it against. "Everyday people ask me when I'll shut down. My answer is, 'I don't know,' because I really don't know."

With less than six months since they opened their new Banani branch, the implications of a shutdown is massive. Investing around 50 lakhs in the business, they will incur immense financial losses if they're forced to close. While the financial aspect is a matter of concern, what they're more worried about is the security of their employees' jobs, or lack thereof.

"There are at least 15 employees that are part of the Takeout family and they'll lose their jobs, their livelihood if we're forced to shut down. Our employees are my responsibility and we will pay their salaries till I can reopen, and I will reopen. If not today, then tomorrow."

While Kabir has decided to shoulder the financial responsibilities of his employees, others don't have the liberty to do the same. "It's such a difficult time for us, not just financially, but also emotionally,"says a Banani cafe owner on the condition of anonymity. "We are heartbroken for our employees. They support full families - where will these young kids go? These hardworking young boys are literally going to lose everything they have. We will survive, we will be able to recoup and somehow make up for the losses, but what about them? Can you imagine the unrest that will follow?" she adds.

Nadvie Ahmed, proprietor of Food Republic, Mad Chef and Rice & Noodle is also a self made entrepreneur who made it in the industry through his restaurants alone. Feeling both threatened and disheartened, Nadvie is skeptical of making any future investments. "I have around 120 people working under these three restaurants. The drive is affecting all of my employees. They are more threatened than I am," he shares.

In an effort to find a voice for a movement that may be able to halt the Rajuk drive, a team of restaurant and hotel owners set up the Federation of Hotel, Guesthouse & Restaurant Owner's Association, BD (FHGROA). In activity since mid April, these allied industry giants include Meraki owner and president of the organisation, Shah Alam.

"We estimate that at least 100,000 people are directly employed, with an estimated investment of 500 thousand crore, around 30% of which are bank loans that will now be at risk of default," says a spokesperson from the federation. He argues that there are 100,000 people directly employed in the industry who support another half a million people, and there's another half a million who are vendors for the restaurants.

"You need to consider the domino effect of such a move. You're not only leading to losses for restaurant owners, but also for other stakeholders. When looked at more broadly, the drive will have massive social impact on not just restaurateurs but also on the general public. A large number of people find their only form of recreation through eating out - going out to eat is the number one preferred form of outings in Dhaka. With restaurants closing shop or being forced to relocate to distant areas, this bust in business will affect thousands of lives.”

Two wrongs can't make a right

Most stakeholders in the hospitality industry aren't denying that they are in the wrong, instead, they are requesting the government to give them the time and resources to rehabilitate. "Anyone that rents a residential space as a commercial one fully understands the implications. I can't say that I am not in the wrong. I am. All I'm saying is that the government has been fully aware of these practices, charging VAT as well as charging us for commercial electricity bills. By charging Tk10.5 per unit, they are taking the advantages of these establishments, but then again they are saying we are being unfair to society. Isn't this strange?" Kabir adds. Despite his arguments, Kabir has only one plea: "We just need more time to recoup, and that's all we're asking for."

The main problem, these owners claim, is in the financial impossibility of relocating to "commercial" areas. With most commercial spaces charging astronomical rent, restaurateurs argue that they won't be able to provide the competitive prices they now offer. "This situation is shameful. I see no future in the hospitality industry. Most commercial places have hiked the price and if we want to rent these places and actually make a profit, we'll have to charge impossible rates too," says Vicky. He argues that a meal that currently costs Tk500 will have to be priced Tk2,000 - four times the price. "This kind of pricing won't make sense, it's completely irrational."

"It's obviously not fair. We are paying taxes and VAT. We are paying for electricity. We may have our restaurants in residential plots but we pay commercial electrical and water bills," Nadvie adds, sharing the same sentiments as Takeout's owner.

"People open restaurants because there IS a demand for it. People want to dine out and that is their only form of recreation. These restaurants aren't creating traffic, if that's one reason they are being evicted. As for security measures, I can guarantee you that at least 80% of restaurants have increased their security measures, with detectors, armed guards and security checks stationed at the entrances ever since the terror attack," Ashraf Uddowlah, joint secretary of EC committee of (FHGROA) argues.

"Here's what I don't understand: if you don't like my restaurant and don't want me to stay, come and tell me. You don't have to demolish my establishment, throw my furniture out and kill my computer system!" adds an exasperated Ashraf. For those places that have been forced to shut down, he says there's only a 50-50 chance of them relocating. After holding several talks with the Finance Minister, both the mayors as well as other government higher-ups, Ashraf has tried to get the federation's point across, also providing recommendations on how they can help these establishments recuperate.

He believes the best way to go about it would be to give these restaurants a list of requirements (security, rent, land etc), as well as time to meet those requirements. "There will be massive financial loss, with several bank defaulters forced to go to jail. Unemployment will reach a newer high and no one will want to enter the hospitality industry anymore, since there is no job security. If this is how things will go, everyone will leave. In that case, we can't help but say that the terrorists have been successful with all the restaurants gone, and Dhaka looking like the dead city they wanted it to be."

So far the federation has held two press conferences and has spoken to different ministries regarding the matter. While they are hoping for change, the future of the restaurant industry looks bleak.

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